Converting the MD5 encrypted password to SHA1 is not possible.
to be able to convert the MD5 password to SHA1, you would first need to be able to decrypt it. both MD5 and SHA1 are 1 way encryption schemes, meaning that they cannot be decrypted.
one way to handle this would be to have a new password column in your user table to store the SHA1 values to, and an old password column that you will store the md5 password from the old database.
On the login page, create a lookup recordset to find the entered email address and the return the old password column.
If a record is returned, and the old password column is not blank, send them to an update password page where they can enter a new password and have it sha1 uncrypted.
you would want to have them enter the email address again, the old password and the new password, use a lookup recordset again for verification before preforming the update.
It will take some expirience with using encryption, hand coding PHP and creating recordsets to get this functional, if you need hands on assistance with this, I would suggest signing up for a premier ticket.